Viva Wine Group (VIVA) Q2 2024 earnings summary

Executive summary

• Achieved record high market shares in the Nordics, with Sweden at 29.1%, Finland at 20.4%, and Norway at 6.3%, further strengthening the number one position in all monopoly markets in Q2 2024.

• Group net sales increased by 6.4% year-over-year to SEK 1,114 million, with organic growth at 6.6%.

• Adjusted EBITA/EBITDA margin rose to 9.6%, a significant improvement from last year, driven by higher sales and improved gross margin.

• Successfully launched 8% alcohol wines in Finland following legislative changes, contributing to growth.

• Profitability improved across segments, supported by price increases, cost control, and successful product launches.

Financial highlights

• Net sales reached SEK 1,114 million in Q2 2024, up 6.4% year-over-year, driven by both volume and price increases.

• Adjusted EBITA increased by 37.9% to SEK 107 million, with margin improvement to 9.6%.

• Net working capital remained stable at SEK 421 million, with NWC/Net Sales LTM at 9.9%.

• Net debt/EBITDA improved to 1.1x from 1.8x in 2023, remaining well within targets.

• Cash flow impacted by planned inventory increase, one-time provision payment, and SEK 154 million dividend payout.

Outlook and guidance

• Gradual gross margin improvements expected through 2024 and into 2025, assuming stable currency rates.

• Continued price adjustments planned in upcoming pricing windows, with focus on maintaining sales and margins.

• Management anticipates continued market growth in 2024, with some easing of external cost pressures and a stabilizing European e-commerce market.

• eCom segment expected to experience volatility due to consumer sentiment, with Q3 starting slightly down.

• The group remains financially well-positioned for further acquisitions and ongoing strategic initiatives.